March 21—One in seven providers in the largest Medicare bundled payment model left after five months, new data reveal. But that may be good news for the program.
The Centers for Medicare & Medicaid Services (CMS) disclosed that 117 hospitals (14 percent) and 135 physician practices (19 percent) left Medicare’s Bundled Payments for Care Improvement Advanced (BPCI Advanced) program by March 1.
As part of the five-year payment model, the 1,299 hospitals and practices that joined for the Oct. 1, 2018, launch had a one-time opportunity to drop out at the beginning of this month for any reason.
BPCI Advanced “continues to have robust participation with approximately 84 percent of participants remaining in the model,” a CMS spokesman said. “We did this based upon stakeholder feedback so that participants would have the ability to experience the model before making a final decision. Participants were able to engage in care redesign, receive preliminary target pricing information, and receive monthly claims data before committing to the model.”
Providers that volunteered to participate in BPCI Advanced face two-sided risk in managing all spending compared to a specified target for episodes of care within any of 32 clinical bundles. Quality measures are factored in as well.
Karen Joynt Maddox, MD, an assistant professor at the Washington University School of Medicine who has studied bundled payment models, said the departures were fewer than she anticipated.
“This is good news for CMS,” Joynt Maddox said. “Even with those departures, they have a solid number of hospitals and [physician group practices] still participating and should be able to draw some good conclusions about the efficacy of episode-based payments under this model.”
Amol Navathe, MD, PhD, an assistant professor of health policy and medicine at the University of Pennsylvania, agreed and noted that the precursor Medicare bundled payment program, which allowed providers to drop out at will, had many departures throughout its course.
“It’s actually lower than I would have thought, just thinking about the prior program,” said Joshua Liao, MD, MSc, FACP, associate medical director for contracting and value-based care at UW Medicine, referring to the 22 percent hospital dropout rate he calculated occurred in BPCI.
Gina Bruno, vice president of clinical strategy at naviHealth, which manages 150 hospitals across 12 health systems in BPCI Advanced, said the program’s overall hospital departure rate was reflected in her company’s clients.
“I think that’s a pretty low number,” Bruno said in an interview. “I look at that as evidence that those participants that are working today are doing so with that commitment to care redesign.”
Keely Macmillan, general manager of BPCI Advanced for Archway Health, which manages 100 provider organizations in the program, also said the overall results were “in line with what we were expecting.”
Reasons for Departures
The opportunity to exit the program without penalty was a key consideration among many providers when they decided to sign up.
“Having that opportunity allowed people to be a bit more bullish in episode selection or in the scope of their participation, knowing they had this opportunity if things didn’t go as expected,” Bruno said.
Participation required changing practice patterns and redesigning patient care to improve quality and reduce costs within the 32 bundled clinical episodes, Bruno said.
Some hospitals lacked sufficient patient volume to justify the expense of overhauling their practice patterns, Bruno said. Others found that the CMS payments for some episodes were inadequate to cover their expenses.
Major joint replacement of the lower extremity was the episode with the most dropouts but still has the highest number of participating providers, Macmillan said. Insufficient patient volumes for those procedures likely stemmed from separate CMS policies that shifted many of them to an outpatient classification, making them ineligible for BPCI Advanced.
“It’s possible that when hospitals started doing the work of bringing stakeholders to the table, building workgroups, etc., they realized just how hard it is to implement care redesign,” Joynt Maddox said.
Next Opportunity to Participate
CMS also announced that in April it will begin accepting more providers into the model ahead of a Jan. 1 start date. That will be the only additional chance for providers to enter the program, which runs through 2023.
The sign-up date is a month earlier than CMS had previously announced and could help by giving new enrollees more time to analyze the data they get from CMS before starting in January, Bruno said.
Bruno was hopeful that the new enrollment round will include some organizations that departed, new providers, and continuing participants that take on additional clinical episodes.
Such enrollees could include participants in the precursor BPCI program “who had taken a wait-and-see approach but are comfortable with the overall idea of episode-based payment,” Joynt Maddox said.
“The first participants are disproportionately large teaching hospitals, so we will likely see a smaller, more community hospital-heavy group in this next round. It’s also possible that all interested parties have already joined and there won’t be much enthusiasm for Round 2—certainly CMS is hoping that’s not the case.”
Applicants should consider what composition of episodes will allow them to attain sufficient volume to make the needed internal changes, Bruno said.
Further Down the Road
CMS is still finalizing the selection of new clinical episodes for Model Year 3, which will include outpatient total knee arthroplasty (TKA).
The addition of TKA episodes could fuel participation of new enrollees, Macmillan said.
“Hopefully you’ll see a lot of those orthopedic practices that either dropped out or sat out the first time knowing they’ll enter the program under the outpatient knee bundle,” Macmillan said.
The addition of outpatient TKA also is a strong signal that CMS is trying to be flexible in how it does bundled payments, Navathe said. Liao agreed that the addition of an outpatient option is another signal that CMS is looking to move alternative payment models “upstream” to more practice-led settings.
“Those are the frontiers, so to speak, in bundled payment policy,” Liao said.